TAIWAN - パーソル総合研究所 · The basic labor-related laws in Taiwan are as follows. 2-1....

PERSOL HR DATA BANK in APAC

TAIWAN

Labor Laws

March 2019

　Dismissal of workers in Taiwan is strictly regulated, and while immediate dismissal is allowed when an employee engages in illegal behavior, as a general rule, a unilateral dismissal by the employer is only permitted according to methods under specific circum-stances that are prescribed in Taiwan's Labor Standards Act. Furthermore, specific circumstances are limited to, for instance, suspension of business, transfer of control, downturn in business or other similar reasons, and Taiwan is adopting a labor policy that is relatively advantageous for employees.

　In order to acquire a work permit and visa, the applicant must first obtain a work permit from Taiwan's Ministry of Labor, and then file a visa application with Taiwan's Ministry of Foreign Affairs, and submit designated documents as needed. While the job categories are limited, Taiwan is receiving manpower in a relatively broad scope without questioning the skill level of the applicant, and it could be said that the conditions for a foreigner to acquire a visa are not that strict.

introduction

INDEX

1. Points to consider regarding labor management in Taiwan, characteristics of laborpractice in Taiwan, and status of recent labor policy ································································································ 2

1-1.　 Revisions of the Labor Standards Act in 2017 and 2018 ··············································································· 21-2.　High turnover rate ····································································································································································· 41-3.　Labor unions ·················································································································································································· 41-4.　Labor inspection ········································································································································································· 4

2. Overview of basic labor laws of Taiwan ···························································································································· 52-1.　Laws related to labor conditions ······································································································································ 52-2.　Laws related to labor and management ······················································································································· 52-3.　Laws related to social welfare ·············································································································································· 62-4.　Laws related to occupational safety and health ······································································································ 72-5.　Others ································································································································································································· 7

3. Duty to prepare internal work regulations in Taiwan, and contents of such internal workregulations ···················································································································································································································· 9

3-1.　Obligation to create work rules ········································································································································ 93-2.　Description of work rules ····················································································································································· 93-3.　Disadvantageous revision of work rules ······················································································································ 10

4. Overview of wage system (bonus, retirement benefit, overtime payment) and other legalsystems in Taiwan ································································································································································································ 11

4-1.　Wages ·································································································································································································· 114-2.　Overtime pay ················································································································································································· 124-3.　Retirement allowance ······························································································································································· 134-4.　Bonus ·································································································································································································· 14

5. Method and points to consider regarding dismissal in Taiwan ····························································· 155-1.　Dismissal with notice ······························································································································································· 155-2.　 Immediate dismissal ································································································································································· 175-3.　Period during which dismissal is prohibited ············································································································ 175-4.　Act for Worker Protection of Mass Redundancy ·································································································· 17

6. Types of foreigner passes and acquisition requirements ················································································· 196-1.　Regulations for employing foreigners ··························································································································· 196-2.　Types of passes ·············································································································································································· 20

About this document ······················································································································································································ 21About the information compiled in this document ············································································································ 21Contact information regarding this document ······················································································································ 21

Company profile ··································································································································································································· 22About PERSOL Research and Consulting ································································································································ 22About PERSOLKELLY Consulting ·············································································································································· 22

1. Points to consider regarding labor management in Taiwan, characteristics of labor practice in Taiwan, and status of recent labor policy 2

1. Points to consider regarding labor management inTaiwan, characteristics of labor practice in Taiwan, andstatus of recent labor policy

1-1.　 Revisions of the Labor Standards Act in 2017 and 2018

　 In Taiwan, the Revised Labor Standards Act (hereinafter referred to as the "Labor Standards Act") was promulgated in

December 2016, and enforced from 1stJanuary 2017 (the "2017 revision"). Under the 2017 revision, several provisions

for protecting the rights of employees and provisions for imposing obligations on companies as employers were introduced;

however, both employers and employee were not satisfied with the 2017 revision and raised a lot of complaint. As such, the

Labor Standards Act was revised again in January 2018 and enforced on 1st March 2018 (the "2018 revision"). Key points of

these revisions are as follows.

　 (1)　A holiday system referred to as "yili yixiu" (two days off per week in which one day is a "xiuxiri"(rest day) and the other day is a

"liri" (mandatory non-work day)) has been enforced. According to the 2017 revision, for every 7 days (1 week), 2 days of holiday

must be offered to employees. Of these two days of holiday, 1 day is referred to as the "xiuxiri"(rest day), and the company can

cause its employee to work on a rest day if a mutual agreement is reached between labor and management. The other of these

two days of holiday is referred to as the "liri" (mandatory non-work day), and, as a general rule, the company cannot cause its

employee to work on a mandatory non-work day unless there are exceptional circumstances such as calamities. Based on the

foregoing mandatory non-work day, this system aimed to grant employees at least one day of holiday per week. However, this

new system was not welcomed by the industries. Therefore, in the 2018 revision, it was decided that employers would be able to

adjust, within the 7-day period, the number of holidays that an employee may consume with union consent or agreement in the

labor-management meeting as well as the approval of the central competent authorities, while employees would still be granted

two holidays per week as a general rule. Further, regarding rules for taking make-up rest days, it is up to the employer and the

employee to negotiate and settle. If the employee does not express the intent to take a make-up rest day after working on a rest

day, the employer should still pay the rest day wages for the work done. It would be considered a violation of the Labor Standards

Act if the employer restricts an employee to only being able to choose to take a make-up day off after working on a rest day.

　 (2)　 In addition to an increase in the amount of overtime pay on a rest day under the 2017 revision, overtime pay on statutory rest

days is now to be counted per actual hours worked on such days pursuant to the 2018 revision.

　 (3)　Obligation to increase the number of days of paid leave to be granted and obligation to purchase unused paid leaves


　According to the 2017 revision, companies were required to convert paid leaves that were not consumed due to the end of the

business year or the termination of the employment contract into monies, and pay such monies to their employees. In addition,

it is revised by the 2018 revision that unconsumed annual leave may be carried forward to the next year upon agreement between

the employer and employee(s); however, the carried forward leave shall be paid out if it is not consumed by the next year-end.

　 (4)　According to the revision in 2018, upon union consent or agreement in the labor-management meeting, overtime cap may be

raised from 46 hours to 54 hours per month and 138 hours every 3 months. Employees would also have the option of converting

their overtime into compensatory leave, but if they are unable to use the compensatory in an agreed period of time, their employer

would be required to convert it back into an overtime payment.

　 (5)　As per works on shift, it is originally required that employers grant consecutive 11 hours rest to employees; however, under the

2018 revision, subject that there is a special reason approved by the competent authority, employers may shorten the rest time

upon union consent or agreement in the labor-management meeting. Provided, there must be at least 8 continuous hours of rest

between shifts.

　 (6)　Strengthening of labor inspection and increase of non-penal fines

A new provision was introduced where, when an employee notifies a competent authority or an inspection organization of an

illegal act by his/her employer, such competent authority or inspection organization must conduct necessary investigation after

receiving the foregoing notification, and notify the employee in writing of the status of investigation within 60 days. Furthermore,

the upper limit of non-penal fines has been increased from 450,000 Taiwan dollars to 1 million Taiwan dollars. In addition,

competent authorities are permitted to additionally impose up to 50% of the maximum amount of statutory fines in accordance

with the business size, number of employees involved in the violation, and grounds of violation.


1-2.　High turnover rate

　According to the statistical data1of the Directorate-General of Budget, Accounting and Statistics, Executive Yuan, R.O.C.

(Taiwan), as of the end of 2015, the average number of years that employees work for the same company is 6 years. In Taiwan,

it could be said that employees switch jobs relatively frequently, and the overall turnover rate is higher in comparison to Japan.

Accordingly, companies are required to improve the work conditions and create an attractive working environment to procure

competent employees.

1-3.　Labor unions

　While the activity of labor unions in Taiwan was not active in the past, in recent years, intense strikes have been conducted

in China Airlines and Taiwan Railways Administration, and these strikes were widely covered by the media. In light of these

circumstances, it could be said that labor unions are now starting to function in Taiwan.

1-4.　Labor inspection

　 In February 2017, there was a major bus rollover accident in Taiwan that caused the deaths of more than 30 passengers.

Because the cause of this accident was considered to be a result of oppressive working conditions of the bus driver, the Ministry

of Labor is currently devising a plan of implementing a labor inspection project in industries that involve much overtime work,

such as in transportation, labor dispatch and financial industries. Since labor inspection is also being actively conducted by

local competent authorities, it is important for companies to create a proper working environment.

1.Official site of Directorate-General of Budget, Accounting and Statistics, Executive Yuan, R.O.C. (Taiwan): https://www.dgbas.gov.tw/public/Attachment/

6929838135LGQL25T.pdf.

2. Overview of basic labor laws of Taiwan 5

2. Overview of basic labor laws of Taiwan

　The basic labor-related laws in Taiwan are as follows.

2-1.　Laws related to labor conditions

Labor Standards Act:

　Basic matters related to labor in Taiwan are set out in the Labor Standards Act. This law was formulated for prescribing the mini-

mum standards of labor conditions in order to protect the interests of employees. Labor conditions that are in violation of the Labor

Standards Act are invalid. Excluding physicians, foreign care-giving employees and other exempted employees, the Labor Standards

Act applies to all employees, irrespective of nationality.

2-2.　Laws related to labor and management

　 In Taiwan, the Labor Union Act, the Collective Agreement Act and the Act for Settlement of Labor Management Disputes

are collectively referred to as the "Three Labor Laws", and these are important laws concerning matters related to labor and

management. These laws prescribe the following basic labor rights; specifically, the right to organize, the right to bargain

collectively and the right to act collectively (right to strike).

Labor Union Act:

　This law prescribes the basic scheme of labor unions including the establishment of labor unions, convocation of meetings, election

of directors and auditors, and accounting of unions.

Collective Agreement Act:

　This law prescribes matters related to the right to bargain collectively, including the negotiation, execution and subject matter of

labor contracts.

Act for Settlement of Labor-Management Disputes:

　This law prescribes matters related to the mediation, arbitration and ruling of labor disputes, and the right to strike, including

matters related to strikes.

Act for Worker Protection of Mass Redundancy:

　This is a special applicable law in cases where a company attempts to dismiss a certain number of employees within 6 months.

Because this law prescribes matters concerning the creation of dismissal plans and the notification to competent authorities, more

time is now required for the dismissal procedures. Accordingly, when a company is to liquidate its business, it is important that the


company confirms whether such liquidation is subject to the application of the Act for Worker Protection of Mass Redundancy.

2-3.　Laws related to social welfare

Labor Insurance Act:

　This law prescribes two types of labor insurance; specifically, "ordinary accident insurance" and "occupational accident insurance".

As a general rule, a company that is hiring 5 or more employees is required to establish a labor insurance unit with the Ministry of

Labor, Bureau of Labor Insurance, and allow its employees to participate in the labor insurance. Employees who belong companies

that have not established a labor insurance unit may voluntarily participate in labor insurance.

(1) Ordinary accident insurance

　　・Benefits: 5 types of "childbirth", "injuries and diseases", "loss of working capacity", "advanced age" and "death"

　　・Insurance premium: 9.5% of the monthly wage of insured employees (generally speaking, 20% is to be borne by employees,

70% is to be borne by employers, 10% is to be borne by the government). However, the insurance premium of employees

participating in employment insurance is 8.5% of the monthly wage of insured employees.

(2) Occupational accident insurance

　　・Benefits: 4 types of "injuries and diseases", "medical", "loss of working capacity" and "death"

　　・Insurance premium: Differs for each business (generally speaking, 100% is to be borne by employers)

Employment Insurance Act:

　This law was formulated for maintaining the basic living security of unemployed workers and promoting job skills. The insur-

ance premium is 1% of the monthly wage of insured employees (among the above, 20% is to be borne by employees, 70% is to

be borne by employers, 10% is to be borne by the government). Even if an employee is not participating in labor insurance, the

employee is forced to participate in employment insurance. Workers who are eligible for employment insurance do not include

general foreign employees, and are limited to employees of Taiwanese nationality and foreign employees who have a Taiwanese

spouse.

Labor Pension Act:

　This is a law prescribing the mandatory retirement plan which was enforced from July 1, 2005. For details regarding the

mandatory retirement plan based on this law, refer to Item 3 of Section 4 (Overview of Wage System in Taiwan) described later.

Note that the mandatory retirement allowance under the Labor Pension Act is different from the advanced age benefit of the

labor insurance described above.

Employee Welfare Fund Act:

　Factories, mining sites and companies hiring 50 or more employees are required to establish an Employee Welfare Fund Com-

mittee, and notify the competent authorities of such establishment. Note that these companies are required to make a certain

amount of contribution to the employee welfare funds, transfer such employee welfare funds to the Employee Welfare Fund


Committee, and use the same for the welfare of its employees. On a practical level, these employee welfare funds are used for

conducting activities for employees, and as cash handouts for the marriage of employees or funerals of their relatives.

Act of Gender Equality in Employment:

　This law prescribes matters related to the prevention of discrimination by gender, prevention of sexual harassment, and holidays

for female employees. Because this law sets forth special holidays for female employees, companies need to check this law upon

creating their work rules.

2-4.　Laws related to occupational safety and health

Occupational Safety and Health Act:

　 In order to prevent occupational accidents, this law prescribes the preventive measures to be taken by companies.

Act for Protecting Worker of Occupational Accidents:

This law prescribes matters related to the acknowledgement of occupational illness, and support to employees who suffered

occupational accidents.

Regulations of the Labor Health Protection:

　 In November 2017, this regulation has been amended in line with the Occupational Safety and Health Act and in response to the

prevention of and spread of musculoskeletal diseases and emotional stress in the workplace. The amendments will be implemented

in several phases provided in the amending Article 26. The first phase of the implementation was on 1 July 2018. Key points of the

amendment are as follows:

(1) A business unit with 50 workers or more, depending on the particular needs of the industry, shall hire or retain worker health

service-related personnel and for units with 300 workers or more, shall hire or retain worker health service-related personnel to

provide onsite health care services for the prevention of new occupational diseases arising from health hazards such as emotional stress

in the workplace.

(2) When the hired or retained worker health service personnel is unable to provide services, the employer is required to substitute such

personnel, through contracting other qualified individuals (i.e. medical professionals).

(3) Amendments to the services provided by the health service personnel onsite and the duration for the retention of records pursuant

to the Occupational Safety and Health Act with respect to various examinations and the records.

(4) Amendments to the special health examination items for those working with specific chemical substances; amendments to require

employers to provide the latest environmental monitoring records for the medical professional who examines workers dealing with

such substances.

2-5.　Others

Employment Service Act:

　This law prescribes matters related to the establishment and permit of recruitment business and the promotion of employment,


including the employment of foreigners.

Regulations on the Permission and Administration of the Employment of Foreign Workers:

　This law prescribes matters related to the conditions and application procedures pertaining to the employment of foreign workers.

3. Duty to prepare internal work regulations in Taiwan, and contents of such internal work regulations 9

3. Duty to prepare internal work regulations in Tai-wan, and contents of such internal work regulations

3-1.　Obligation to create work rules

　According to Article 70 of the Taiwanese Labor Standards Act and Article 37 and 38 of the Enforcement Regulations of

said Act, a company employing 30 or more employees is required to create work rules, and notify the competent authorities

of such work rules within 30 days. Furthermore, the company is required to post such work rules at the workplace, and print

and distribute the same to all employees. When the work rules are revised, such revisions must be similarly notified to the

competent authorities within 30 days. The revision of work rules for which the approval of competent authorities has not

been obtained is invalid.

　 If a company has multiple branch offices, the company may freely create different work rules to be applied to the respective

branch offices, or create work rules that apply to the entire company, whichever the company deems appropriate.

　 If a company violates the foregoing provision, the company may be imposed a fine of 20,000 to 300,000 Taiwan dollars

(competent authorities may impose a fine of up to 450,000 Taiwan dollars depending on the size of and violation by the

company). Based on Article 80-1 of the Labor Standards Act, competent authorities may publicly announce the name of the

violating company and the name of the business owner, and order the company or business owner to remedy the violation.

3-2.　Description of work rules

　Pursuant to Article 70 of the Labor Standards Act, the work rules must prescribe the following matters:

　　 (1) Working hours, recess, holidays, annual paid leave of absence and the rotation of shifts for continuous operations;

　　 (2) Standards, method of calculation and pay day of payable wages;

　　 (3) Length of overtime work;

　　 (4) Allowances and bonuses;

　　 (5) Disciplinary measures;

　　　　 (because matters related to penalties and ownership of copyrights require the consent of individual employees, companies may

not unilaterally prescribe these matters in their work rules)

　　 (6) Rules for attendance, leave- taking, award and discipline, promotions and transfer;

　　　　 (provisions related to performance review, awards and sanctions must be specific, reasonable and clear, and a comprehensive

provision such as "other circumstances" may not be prescribed)

　　 (7) Rules for recruitment, discharge, severance, termination and retirement;

3. Duty to prepare internal work regulations in Taiwan, and contents of such internal work regulations 10

　　 (8) Compensation and consolation payment for accident, injury or disease;

　　 (9) Welfare measures;

　　 (10) Safety and health regulations to be followed and observed both the employer and the worker;

　　 (11) Methods for communication of views and enhancement of cooperation between employer and worker; and

　　 (12) Miscellaneous matters.

　Because work rules that are in violation of mandatory provisions of regulatory provisions of laws, or in breach of

labor-management discussions, are invalid, the work rules created in Japan cannot be applied directly, and need to be recreated

in accordance with the laws of Taiwan.

3-3.　Disadvantageous revision of work rules

　According to the interpretation of Notice No. 27545 of the MOL Committee (80), because labor conditions are matters to

be decided upon consultation between labor and management, when a company wishes to revise the labor conditions of the

work rules in a manner that is disadvantageous to employees, the company needs to discuss such revision with its employees.

On a practical level, when a company is to notify a disadvantageous revision of the work rules to competent authorities, the

company is often required to obtain the consent of all employees or submit a certificate of consent of the labor-management

meeting.

4. Overview of wage system (bonus, retirement benefit, overtime payment) and other legal systems in Taiwan 11

4. Overview of wage system (bonus, retirement benefit,overtime payment) and other legal systems in Taiwan

4-1.　Wages

(1) Minimum wage

　From 1stJanuary, 2018, the minimum wage is 22,000 Taiwan Dollars per month, and 140 Taiwan Dollars per hour.

This minimum wage standard shall apply to child workers.

(2) Allowance

　Unlike Japan, in Taiwan, it is not often the case that allowances such as housing allowance, executive allowance and

family allowance are paid in addition to the base pay.

(3) Principle of payment of full amount

　Unless otherwise specified in laws or in an agreement between labor and management, wages must be paid in their full

amount to employees. Furthermore, companies may not make deductions in advance, from the wages of employees, to

prepare for penalties or compensation costs. For instance, a company is prohibited from deducting a certain amount from

an employee’s wage as a penalty for not reading a work-related SNS message after leaving the office.

(4) Principle of payment in currency

　As a general rule, wages must be paid in legal currency. However, the employment contract may prescribe that a part

of such wages be paid in kind based on common practice or the nature of the worker’s job description.

(5) Principle of same job, same wage

　The principle of "same job, same wage" has been established in accordance with the recent revision.


4-2.　Overtime pay

　Overtime pay (which shall mean wages for working time over 40 hours per week and for working time on rest days) is

broadly classified into the following four types, and, while the calculation method is different for each type of overtime pay, as

a general rule, overtime pay is calculated according to the method of "hourly pay x overtime hours x fixed rate".

　 It should be noted that, in Taiwan, the calculation method of "hourly pay" of the monthly wage system differs from Japan.

In Japan, while the hourly pay is calculated by dividing the monthly wage by the average number of prescribed working hours

(excluding holidays) per month, in Taiwan, the hourly pay is calculated by dividing the monthly wage by 240 hours (30 days x

8 hours without excluding holidays). As mentioned above, with the 2018 revision, overtime cap has been amended (increased).

Employees would also have the option of converting their overtime into compensatory leave instead of obtaining the overtime

pay.

(1) Overtime pay on weekdays

Overtime pay for the 1st hour to the 2nd hour = hourly pay×overtime hours× (1+1/3)

Overtime pay for the 3rd hour to the 4th hour* = hourly pay×overtime hours× (1+2/3)

*Because the overtime hours on weekdays are limited to 4 hours per day under the Labor Standards Act, overtime work

exceeding 4 hours is not permitted under laws. Nevertheless, as the actual conditions, it could be said that there are cases

where, as with other countries, overtime work is conducted beyond the foregoing limit.

(2) Overtime pay on rest days

　Previously, employers were required to pay at least 4 hours wages once an employee works on a statutory rest day and to

pay another 4 hours wages for every 4 working hours. However, under the 2018 revision, such overtime is to be counted

per actual hours. Furthermore, if the employee works more than 8 hours on a statutory rest day, the additional overtime

pay shall be as follows:

Overtime pay for the 1st hour to the 2nd hour = hourly pay of a normal working day×overtime hours× (1+1+1/3)

Overtime pay for the 3rd hour to the 4th hour* = hourly pay of a normal working day×overtime hours× (1+1+2/3)

(3) Overtime pay on statutory holidays

　Overtime pay for the 1st to 8th hour = wage per hour× overtime hours (8 hours)*.

*Even if the actual overtime hours are less than 8 hours (for instance, 3 hours), companies are required to pay 8 hours’

worth of overtime pay per day.


(4) Overtime pay on mandatory non-work days

　Overtime pay for the 1st to 8th hour = (wage per hour× overtime hours (8 hours)*) + 1 day of substitute holiday.

*Even if the actual overtime hours are less than 8 hours (for instance, 3 hours), companies are required to pay 8 hours’

worth of overtime pay per day.

4-3.　Retirement allowance

　Retirement plans in Taiwan are either the Old Retirement Plan under the Labor Standards Act or the New Retirement Plan

under the Labor Pension Act (implemented from July 1, 2005). While both of these retirement plans are currently valid, the

calculation method and the accumulation rules of retirement allowance are different.

(1) Eligible workers

Old Retirement Plan:

　Employees who were hired up to June 30, 2005 and who did not select the New Retirement Plan before June 30, 2010. All

foreign employees are subject to the application of the Old Retirement Plan irrespective of the time that they joined the company

(provided, however, that the New Retirement Plan is applied to foreign employees who married a Taiwanese national or foreign

employees who divorced a Taiwanese national).

New Retirement Plan:

　Employees who were hired from July 1, 2005 onward.

(2) Overview of plans

Old Retirement Plan:

　According to the Labor Standards Act, companies are required to accumulate, in a special account, an amount corresponding

to 2% to 15% of the monthly wage of employees to which the Old Retirement Plan is applied. Employees who (a) have worked

for 15 years or longer for the same company and reached the age of 55, (b) have worked for 25 years or longer for the same

company, or (c) have worked for 10 years or longer for the same company and reached the age of 60 can receive retirement

allowance. However, because the retirement allowance of the Old Retirement Plan is placed in a management account of each

company, if an employee leaves the company and joins another company, as a general rule, that employee cannot withdraw his/

her retirement allowance that was accumulated in the previous company.

Amount to be paid:

　Two months’ worth of the average monthly wage (average monthly wage of the six-month period before resignation/

retirement) for each year of service up to 15 years of service, and one month worth of the average monthly wage for each

year of service in excess of 15 years of service are to be paid in a lump sum. However, the upper cap shall be 45 months’ worth


of the average monthly wage.

New Retirement Plan:

　According to the Labor Pension Act, companies are required to make a contribution at a rate that is not less than 6% of the

monthly wages of employees to which the New Retirement Plan is applicable, and deposit such contribution in a special account

of the Bureau of Labor Insurance. Note that employees can, on a personal basis, additionally make contributions to the retirement

allowance within a range of 6% of their monthly wage. The bereaved family of (a) employees who have reached the age of 60

(irrespective of whether or not they have actually resigned/retired), and (b) employees who have died before reaching the age of

60 may receive the accumulated retirement allowance. Because the retirement allowance of the New Retirement Plan is placed

in a management account of each employee, even if an employee leaves the company and joins another company, that employee

will take over the previously accumulated retirement allowance.

Amount to be paid:

　　・Monthly payment: Monthly payment is determined based on various coefficients such as the annuity table and the interest

rate in light of (actually accumulated personal retirement allowance + cumulative investment income)

　　・Lump-sum payment: Actually accumulated personal retirement allowance + cumulative investment income

4-4.　Bonus

　According to Article 29 of the Labor Standards Act, after the end of a fiscal year, if a company had gained profits, the

company is required to pay a bonus, or distribute profits, to employees who have continuously worked for one year without

any fault. Note that, on a practical level, it is customary for Taiwanese companies to pay a certain amount of bonus to employees

before the Chinese New Year.

5. Method and points to consider regarding dismissal in Taiwan 15

5. Method and points to consider regarding dismissalin Taiwan

　 In Taiwan, employees are protected under the Labor Standards Act, and cannot be dismissed unless there are statutory

grounds.

　Dismissal of employees in Taiwan can be broadly classified into the following two types; specifically, "dismissal with notice"

under Articles 11 and 20 of the Labor Standards Act and "immediate dismissal" under Article 12 of the Labor Standards Act,

depending on whether or not there is a notice period.

5-1.　Dismissal with notice

(1) Statutory grounds for dismissal:

　When there are any one of the following grounds, a company may notify its employee and terminate the employment

contract:

　　 (1) the company has closed its business or its business operation or property has been transferred, and the company has lost

its corporate status;

　　 (2) the company has suffered operating losses or reduced its operation;

　　 (3) the company is required to suspend its business for 1 month or longer due to a force majeure event;

　　 (4) the company is required to reduce its workforce due to changes in the nature of its business, and the terminated employees

cannot be reassigned to other suitable positions;

　　 (5) a particular employee is clearly unable to perform satisfactorily the duties required of the position held by that employee;

or

　　 (6) the company is reorganized or acquired.


(2) Notice period:

　 If a company terminates an employment contract without notice, the company is required to pay wages corresponding

to the notice period to the employee.

(3) Duty to report:

　According to the Employment Service Act, when a company is to dismiss its employee based on a dismissal with notice,

the company is required to submit to local competent authorities and public service institutions, at least 10 days before the

employee leaves the company, a material containing matters such as the name, gender, age, address, phone number, job

description, grounds for dismissal, and necessity of vocational guidance of the employee to be dismissed. Consequently,

competent authorities and public service institutions are able to provide proper information for reemployment to the

employee to be dismissed.

(4) Discharge allowance:

Employees to which the Old Retirement Plan is applied:

　Companies must pay a discharge allowance of one month worth of average monthly wage (average monthly wage of the

six-month period before resignation/retirement) for each year of service within 30 days after the termination of the employment

contract.

Employees to which the New Retirement Plan is applied:

　Companies must pay a discharge allowance of 0.5 months’ worth of average monthly wage for each year of service within 30

days after the termination of the employment contract. However, the upper cap shall be 6 months’ worth of the average monthly

wage.


5-2.　Immediate dismissal

　When there are statutory grounds that are attributable to the employee, the company may immediately terminate the

employment contract without notice.

(1) Statutory grounds for dismissal:

　A company may terminate an employment contract without any notice to the employee in the event of any one of the following

grounds:

　　 (a) an employee misrepresents any fact at the time of signing an employment contract in a manner which might mislead the

company and thus cause damage to the company;

　　 (b) an employee commits a violent act against or grossly insults the employer, the employer’s family member or agent, or a fellow

employee;

　　 (c) an employee has been sentenced to temporary imprisonment in a final and conclusive judgment, and is not granted a suspended

sentence or permitted to commute the sentence to payment of a fine;

　　 (d) an employee is in serious breach of the employment contract or work rules;

　　 (e) an employee deliberately damages or abuses any machinery, tool, raw materials, product or other property of the employer or

deliberately discloses any technical or confidential information of the employer thereby causing damage to the employer; or

　　 (f ) an employee is, without good cause, absent from work for three consecutive days, or for a total six days in any month.

　With regard to the termination of the employment contract under Items (a), (b), (d), (e) and (f ) above, the company is required

to terminate the employment contract within 30 days from the day that the company learns of such grounds for dismissal.

(2) In the foregoing case, the company is not obligated to pay a discharge allowance.

5-3.　Period during which dismissal is prohibited

　To protect female employees and employees suffering from occupational accident, companies are prohibited from dismissing

such employees during the maternity leave period and leave period for the occupational accident, unless the continuation of

business becomes impossible due to calamities or other inevitable reasons.

5-4.　Act for Worker Protection of Mass Redundancy

　The Act for Worker Protection of Mass Redundancy is applicable when a company hiring less than 30 employees is to

dismiss more than 10 employees within 60 days, a company hiring 30 or more employees or less than 200 employees is to

dismiss more than 10 employees within 60 days or dismiss more than 20 employees in one day, a company hiring 200 or more


employees and less than 500 employees is to dismiss 1/4 of its employees within 60 days or dismiss more than 50 employees

in one day, or a company hiring 500 or more employees is to dismiss 1/5 of its employees within 60 days or dismiss more than

80 employees in one day, or dismiss more than 200 employees within 60 days or more than 100 employees in one day.

　The Act for Worker Protection of Mass Redundancy prescribes procedures that are more complex than the general dismissal

with notice described above. For example, a company is required to submit its dismissal plan to competent authorities, labor

unions and employees to be dismissed, or publicly announce such dismissal plan, at least 60 days before the mass discharge.

Note that the company is required to hold a joint labor management conference within 10 days from submitting the dismissal

plan. If an agreement is not reached between labor and management regarding the dismissal, competent authorities will

organize a consultative committee, and actively intervene in the labor-management consultation. On a practical level, in

order to avoid the application of the Act for Worker Protection of Mass Redundancy, there are cases where companies provide

employees with an allowance in an amount that is greater than the statutory discharge allowance, and thereby request employees

to voluntarily resign.

6. Types of foreigner passes and acquisition requirements 19

6. Types of foreigner passes and acquisition require-ments

6-1.　Regulations for employing foreigners

　 In Taiwan, the basic law for employing foreigners is Chapter 5 of the Employment Service Act. As a general rule, when

employing foreigners, a companymust foremost file for a work permit with theWorkforceDevelopment Agency. Subsequently,

the company is required to file for a residence pass with the Bureau of Consular Affairs, Ministry of Foreign Affairs, and file

for a resident certificate with the National Immigration Agency within 15 days after the foreign employee arrives in Taiwan.

　 If a foreigner works in Taiwan without a work permit, the employer and the foreigner may be ordered to pay a fine or leave

Taiwan.

　Note that the line of work and job description of foreigners are limited, and the regulations need to be checked individually

because there are different regulations regarding the qualification of employers, qualification of employees, and minimumwage

for each line of work.

　The line of work and job description of foreigners are as follows:

　　 (1) Specialized or technical work;

　　 (2) Director/Manager/Executive of a business invested in or set up by foreigner(s) with the authorization of the Government of

Taiwan;

　　 (3) Teacher at a public or registered private college/university or school established especially for foreign residents, teacher teaching

foreign language(s) at a high school or below, and teacher teaching course(s) at a high school’s bilingual department or at

bilingual school;

　　 (4) Full-time teacher teaching course(s) on foreign language(s) at a short-term class registered for supplementary schooling in

accordance with the Supplementary Education Act;

　　 (5) Sports coach and athlete;

　　 (6) Religious, artistic, and show business work;

　　 (7) Crew member of a vessel;

　　 (8) Marine fishing/netting work;

　　 (9) Household assistant and nursing-related work;

　　 (10) Work designated by the Central Competent Authority in response to national major construction project(s) or economic/

social development needs; and

　　 (11) Other specialized work ad hoc approved by the Central Competent Authority due to the lack of such specialist in the domestic

employment market and the business necessity to retain the service of such specialist therefor.

　For (1) and the second manager onward of (2) above, there is a limit to the minimum wage of 47,971 Taiwan dollars.

6. Types of foreigner passes and acquisition requirements 20

　For details, companies need to refer to the "Regulations on the Permission and Administration of the Employment of

ForeignWorkers", the "Qualifications and Criteria Standards for foreigners undertaking the jobs specified under Article 46.1.1

to 46.1.6 of the Employment Service Act" and the "Reviewing Standards and Employment Qualifications for Foreigners

Engaging in the Jobs Specified in Items 8 to 11, Paragraph 1 to Article 46 of the Employment Service Act".

6-2.　Types of passes

　As a general rule, foreigners to stay in Taiwan for an extended period are required to hold a residence pass. There are the

following types of residence passes depending on the purpose of residency.

　Furthermore, (1) a foreigner who legally resided in Taiwan for a consecutive period of 5 years in excess of 183 days per year,

and (2) a spouse or a child of a Taiwanese national who has a legal resident status in Taiwan for 10 years or longer and who,

of such 10-year period, resided in Taiwan for a period of 5 years in excess of 183 days per year, may apply for a permanent

resident status. When a foreigner with a permanent resident status is to work in Taiwan, there is no need to apply for a work

permit through one’s employer.

About this document 21

About this document

About the information compiled in this document

The various data and commentary presented in this document has been compiled and written by One Asia Lawyers, based on

information released at the time of this document’s creation; its accuracy and completeness are not guaranteed. In addition,

One Asia Lawyers bears absolutely no responsibility for any damages incurred as a result of the use of the information in this

document.

●Author：One Asia Lawyers

●Writing date：June/2018

Contact information regarding this document

Persol Research & Consulting Co., Think Tank Headquarters

Overseen by the Persol HR Data Bank, APAC

E-mail:[email protected]

Tel.: +81-3-6385-6888

Company profile 22

Company profile

About PERSOL Research and Consulting

PERSOL Research and Consulting is the PERSOL Group’s think tank and consulting firm.

Through surveys and research, we uncover and clarify issues surrounding people and organizations in areas such as labor

markets, human resources development, new forms of employment, and working styles. We also work to investigate and

present solutions.

We provide solutions in areas including organizational and personnel consulting, people analytics, assessments, talent

management systems, human resources development, and employee training, based on the knowledge built up through our

survey and research activities.

We link these surveys, research, and solutions organically to help solve the various problems that arise in society and

corporations.

About PERSOLKELLY Consulting

PERSOLKELLY Consulting aspires to be a leading global human resource consulting and professional services organisation

committed to shape the future workforce by empowering individuals, organisations and societies.

To further align the corporate brand strategy, PERSOLKELLY Consulting is a rebrand of BTI Consultants in Asia and

Intelligence SMC in Hong Kong. These brands combine their vast experiences and knowledge in innovative talent

development, HR & Management advisory, organisational effectiveness and insights-driven HR solutions to achieve optimal

results for their clients in the regions.

Today, PERSOLKELLYConsulting is represented in 6 countries, includingHong Kong, India, Indonesia, Malaysia, Singapore

and China (operating under Intelligence Anchor Consulting). It is also in active collaboration with PERSOL Research and

Consulting in Japan.

PERSOLKELLY Consulting is an entity within the PERSOLKELLY company, a joint venture between PERSOL Group, and

Kelly Services, Inc, forming one of the largest recruitment companies in Asia Pacific.

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